CREATIVITY, innovation and quality prove the enduring mix for the licensed trade in harder times. Sarah Smith, partner and head of licensing at Sintons LLP looks at lessons from 2010 - a tough year for many in the leisure sector, and highlights some areas to watch in 2011.
IN comparison with many sectors, it is fair to say the leisure industry has had a particularly tough time over the last few years. With higher taxes on alcohol, less money in customer’s pockets and increasing overheads, it is not surprising that the economic climate has had such a devastating impact on the industry.
Even the strongest operators regularly complain that they are working twice as hard to pull in the same level of profits they were making 10 years ago.
What then is the key to success? Looking back over the licensing work we carried out for our clients in 2010, it shows that the operators who are thriving are the ones that are the most creative and innovative, and provide quality above all else.
Venues that bring something different to the region are always going to attract a good customer base. Two clients who notably identified gaps in the market last year were Hoults Estates Limited and Pure Leisure Limited.
Whilst Hoults’ main business is developing and letting business units to SMEs, they saw an opportunity to licence almost their entire 10-acre premises (Hoults Yard) to permit it to be hired out as a venue space.
They can now offer event organisers a unique venue close to Newcastle city centre, enabling a very diverse range of licensed events from Christmas markets and dance music nights, to intimate dining experiences and art shows. These events often add to the appeal of the location for tenants, many of whom are in the media and creative industries sectors.
In December, Pure Leisure opened its doors to Boulevard, Newcastle’s only dedicated cabaret venue. Their advertising line “where Burlesque meets Broadway” says it all – you don’t get a more flamboyant venue than this in the North East!
Originally intended to be another nightclub, Pure Leisure realised that the state of the leisure market meant this venue might struggle to be profitable, so they then set about creating something more distinctive and compelling to customers. The result is stunning, and again, a first for the region.
The creative thinking of both operators will hopefully be rewarded by thriving business in 2011. While creativity and innovation are vital aspects of ensuring a strong offering to customers, high quality and doing things properly remains essential in the licensed trade.
:: Sarah Smith can be contacted on 0192 226 4897 or firstname.lastname@example.org . www.sintons.co.uk
Sarah's advice on the year ahead for leisure
Last year we were consulted on a number of occasions by operators whose “innovative thinking”, particularly in relation to drinks promotions, often pushes the boundaries of licensing law. Clients can find themselves faced with potential review proceedings as a result. Any potential profit in these type of promotions is soon wiped out by the time and effort spent in trying to placate the authorities and avoid a review, the outcome of which could cripple a business. Our advice is clear – stay well away from these and put your creative thinking into improving the basics instead.
NEW MANDATORY CONDITIONS FOR ON-LICENSED PREMISES
In another legal development, operators of on-licensed premises who are thinking about offering drinks promotions need to be particularly aware of the Licensing Act 2003’s new Mandatory Conditions. Care is needed as these apply to their premises licences, whether or not they are actually written on the licence.
These conditions specifically prohibit certain types of drinking games, happy hours and other drink-related promotions.
If not complied with they may give rise to criminal prosecution or a review of the licence.
Whilst the Guidance to the Licensing Act 2003 provides some indication of what a prohibited promotion is, this is still a difficult area to interpret.
Operators would be wise to seek advice on new promotions prior to spending money on marketing, as many of these will almost certainly fall foul of the new Mandatory Conditions.